Putting a fair price on water: a strategic investment

Business, governments and citizens all have a role to play in ensuring that pricing and investment in water reflects its true value

A water purifying lagoon in Decatur, Georgia, US. The US Environmental Protection Agency estimates that improving wastewater infrastructure will cost between $300bn and $1tn over the next 20 years. Photograph: Seth Perlman/AP

In the wake of the devastation caused by Hurricane Sandy, severe water shortages that continue to plague large parts of the globe, and the close of another US election season, now is an opportune time to bring water to the forefront of the US agenda.

We're losing a lot of water. In most cases it's water that we have already paid to treat and that we will never get to use due to America's aging, crumbling infrastructure. The impact of this loss on our environment and bottom line is startling. The US Geological Survey estimates that we lose 1.7 trillion gallons of drinking water per year from distribution systems in the US. The US Environmental Protection Agency estimates that repairing, replacing and upgrading aging water and wastewater infrastructure in America will cost between $300bn and $1tn over the next 20 years. That doesn't take into account the lost economic productivity of this leakage. Yet, in spite of steady price increases over the last few years, the rates we pay for water and wastewater services in our homes and businesses don't come anywhere near what we'll need to fix the problem.

This disconnect is one reason we conducted the 2012 Xylem Value of Water Index, a nationwide poll examining what US voters think should be done about the country's water infrastructure and who should pay for it. We wanted to explore the widely held view that water infrastructure is a low priority for Americans, and to determine what Americans are willing to do to ensure that their country continues to have a safe, steady supply of clean water for generations to come.

The Index, which surveyed 1,008 adult Americans, revealed that more than three-quarters (77%) of Americans are concerned about the state of the nation's water infrastructure system, and a significant majority of Americans (88%) believe US water infrastructure needs reform. Most (61%) say they would be willing to pay more each month to ensure that today's problems are fixed both so that clean water keeps flowing and to avoid even more drastic rate increases in the future.

Specifically, respondents say they are willing to pay an average of $7.70 more per month for water, provided that money goes toward upgrading US water infrastructure, up from a response of $6.20 more per month when we asked the same question in our survey in 2010. An increased investment of only 12% each month by 61% of American households alone would lead to increased investment in US water infrastructure by about $6.4bn per year, six times the current federal investment in drinking water through the Drinking Water State Revolving Fund. Though not the answer to the entire problem, this would be an excellent start.

While the Index findings indicate growing public recognition of the pressing need to improve our water infrastructure, they also show that much more needs to be done to educate Americans about the value of water and the critical role that water and water infrastructure play in our lives and in the health of the economy.

In order to develop a sustainable solution to global water issues, a shared response from business, citizens and government must take place.

Technology plays an instrumental role in the smarter use of water. It helps us discover new and better ways to manage and reuse water, from the moment it is drawn from the source to when it is tested, treated, disinfected, transported, reused and ultimately, returned to streams and rivers cleaner than when it was first sourced. Innovative technology brings better solutions to help run our water and wastewater systems more efficiently.

To keep all of our water flowing, and to ensure our own personal health, as well as the health of our communities and economy, it's up to all of us to urge policymakers to set fair water pricing so we can invest in maintaining our water infrastructure. Improving the nation's water infrastructure is a strategic investment that will save taxpayers money, spur job creation and help stimulate the economy both in the near and long-term.